Caroline St-Hilaire on Excise Tax Act

moved that BillC-456, An Act to amend the Excise Tax Act, be read the second time and referred to a committee.

Mr. Speaker, today we are debating Bill C-456, an act to amend the Excise Tax Act, which is intended to exempt cloth and disposable diapers for children from the goods and services tax.

First, I will tell you that I am very honoured to speak in this House, especially since Quebec is celebrating family week until May 16. I invite the people of Longueuil and Quebec to take part in the many events that are being held everywhere in Quebec. Let us say that the time is quite appropriate to debate a bill on families. It could not be more timely.

As you know, the GST is aimed at a wide variety of goods and services, and it applies to products that are considered essential to families. However, there are several exceptions based on social, economic or administrative grounds. Supplies are thus said to be tax-free or exempted. The purpose of my bill is precisely to change one of these exceptions in Schedule V to the act by adding supplies relating to child care.

In terms of the mechanics, there is no problem, and GST exemptions have already been granted on a number of essential, not to say indispensable, goods and services, as should be the case for children's diapers. For example, there is no GST on adult diapers, while there is GST on diapers for children. Someone will have to explain the logic of that to me.

As for the Bloc Quebecois's interest in this, we have always been concerned about the interests of families and about improving the living conditions of families. In order to do so, we must introduce progressive measures that will encourage and enable young couples to start and raise a family in dignity and respect for family values. This is a very simple step and only a small one, but we all know that long journeys are begun with small steps.

Thus, in proposing to abolish the GST on diapers, I want to give families with young children a way to decrease the cost of certain purchases, such as diapers for their children. At present, GST applies to all these products, even though they are essential to the care and upbringing of a child.

Since I am now the mother of two beautiful boys—probably the most beautiful and the sweetest—Étienne and Louis-Félix, I can testify to the essential nature of these items. Believe me, it ends up costing a lot.

We cannot talk about families without talking about challenges. One of these challenges is to ensure that Quebec families have a better income, using fiscal and other measures. Another major challenge requiring attention is the decline in population growth. Obviously, the mere fact of exempting diapers from GST will not entirely improve a family's financial situation, or the demographic problem. Still, I am convinced that with a number of measures, we can make a difference and encourage couples to have larger families and more children.

Some will say that the amount families will save will be very small. In truth, it is not a large sum for a middle-class family. On the other hand, it would make a difference for a family living below the poverty line. Unfortunately, many families in Quebec, and in Canada, are raising their children in sometimes extremely difficult conditions. This amount, however tiny, can make a huge difference for many people.

The federal tax system is partially responsible and is among the most voracious and regressive in the industrialized world, and young families and women are its first victims.

The Minister of Finance must recognize these inequities, which oblige a couple with two children and a single income to pay federal income tax starting on an income of $13,719, while in Quebec, that same family starts paying income tax only when its income reaches $30,316. The federal tax threshold is completely unacceptable. The $13,719 is below the poverty line established in Quebec in 2003, which is $22,000 for a couple with two children.

Quebec, however, is among the most progressive governments in North America. Yet, it does not have the same manoeuvring room as the federal government since, unlike Ottawa, its expenses increase more quickly than its revenue. Obviously, not everyone has the same priorities, and the reality for families seems to escape the federal government.

If the Minister of Finance wants to show openness to families, then he should promise right now to change federal taxation, as the Bloc Quebecois has been asking since 1994.

The federal government must resolve once and for all the many injustices impoverishing Quebec and Canadian families, and thereby perhaps improve the birth rate.

To me the demographic problems are particularly worrisome. According to Statistics Canada, Canada's birth rate declined again in 2002 and dropped to 10.5 births for every 1,000 people. Over the past 10 years alone the rate dropped by 25.4%, which is an unprecedented dip.

In Quebec, there were 72,477 births in 2002, or 1.7% fewer births than in the previous year. At the beginning of the 20th century, the birth rate was close to 40 births for every 1,000 people in Quebec. The fertility rate is currently 1.5 children per woman, while a rate of 2.1 children per woman is needed and this does not take into account the contribution of immigration to stabilizing the population.

In light of these revealing data, I feel it is our duty as parliamentarians to introduce measures to promote demographic growth. If we do not, there will be heavy consequences in the next few decades. It is imperative to get our priorities straight.

Of course, the implementation of a real family policy is the responsibility of the governments of Quebec and the other provinces, but the federal government also has a major duty in this respect, namely to give Quebec and the provinces the means to carry it out. The federal government, which is awash in surpluses and able to find money for its friends, should be able to find some for families at least.

The federal government can afford to act on my bill, Bill C-456, and exempt baby diapers from the GST. GST revenues are forecasted to be $31 billion in 2004-05, while my proposal would cost slightly over $2 million a year.

According to Statistics Canada, in 2001, the federal government took in around $2.3 million in revenues from the GST on disposable diapers. It is fair to assume that, if it eliminated the GST, its revenues would decrease by the same amount every year. This goes to show that the measure means very little to the federal government, but it would certainly make a huge difference for some families.

As a matter of fact, while on the topic of the GST, I would like to remind the House that on, May 6, the National Assembly unanimously passed a resolution supporting the government's efforts to ask Ottawa to transfer the GST revenues to the province to rectify the fiscal imbalance and to fund, among other things, health care or other measures to help families.

I must deplore therefore the attitude of the Prime Minister of Canada, who clearly stated he had no intention of transferring any GST revenues. In Quebec alone, the GST collected on behalf of Canada amounts to $7 billion. Imagine what we could do in Quebec if we had an extra $7 billion.

The federal government has many other sources of revenue. Allow me to remind you of a few savings it made on the backs of Quebec families.

For instance, ever since the introduction of the $5 daycare program in 1998, the federal government has saved $1 billion on the backs of Quebec parents, without counting the parental leave program, which deprives Quebec families of a much more generous plan than the federal one, and which the Quebec government is postponing implementing for lack of money. What the federal government owes for this program is now estimated at around $630 million.

These are but a few examples. I do not have the time to give you the whole picture of the shortfall in Quebec and the surplus in Ottawa, commonly known as the fiscal imbalance, which deprives Quebec of $50 million every week.

We in Quebec would know just where to invest that money, in a society where Quebec takes care of its young people, its families and its senior citizens. We would invest in a healthy, well-educated society, keen to bring the stork back to Quebec.

In closing, I would like to thank Lisa Dion from my riding, who shared with me her indignation that there is tax on diapers. I share that indignation. This is one more example of the role and the power of the public.

Finally, on the occasion of family week in Quebec and in light of the importance of this measure, I seek the support of all my colleagues in the House of Commons.